The geopolitics of Venezuela’s crisis

As the Venezuelan crisis deepens, the risk of increasing escalation grows exponentially in the country, the Western Hemisphere and internationally.

Domestically, Nicolas Maduro’s standard playbook is attempting to defuse the situation by buying time through proposals for outreach and dialogue with the opposition – as he did during previous crises since 2013, which he managed to survive. Simultaneously, he will also continue to threaten and intimidate opposition leaders with arrest and detention and use violence against protesters whenever he deems necessary.

However, as time goes by, the state of fear which the regime has relied on so heavily for years has been dissipating as the opposition’s ranks have swelled across socio-economic lines and become far more broad-based. Furthermore, economic collapse has accelerated since the last round of massive anti-regime protests in 2017 which claimed more than 100 lives. The stakes are much higher for the Maduro regime this time around.

A demonstration in Venezuela

Internationally, diplomatic gridlock at the United Nations will continue to prevail largely according to existing geopolitical rifts and diplomatic fault lines. At the Security Council, it generally pits the U.S., France and the U.K. representing states supporting the rule of law and democratic norms against Russia and China promoting a specific view of national sovereignty conceived as non-interference in the domestic affairs of nations, which principally allows leaders to act with impunity at home.

The broader geopolitical standoff will endure for the foreseeable future unless the Maduro regime implodes, some form of intervention takes place, or at some point economic realities force the regime’s creditors to conclude it is no longer economically viable and political change is inevitable in order to secure and collect long-term debt payments.

Despite being the regime’s leading creditor, China pursues a pragmatic and calculated foreign policy based primarily on securing its long-term economic interests globally. PetroChina, a Chinese state energy firm, recently dumped PDVSA, Venezuela’s state oil company, as an equity partner in a joint refinery project in southern China. Beijing’s traditional policy is to not comment on the domestic affairs of other states. Furthermore, China has broader regional interests in Latin America beyond just Venezuela. It is a leading trading partner to many of the region’s largest economies, including Brazil and Argentina – which are currently aligned with the US in pushing for Maduro’s ouster.

Although Russia’s economic and strategic interests in Venezuela are limited compared to China, President Vladimir Putin would prove very reluctant to pull the plug on Maduro. Putin is attempting to counter US influence globally wherever and whenever possible, even in its own hemisphere. Venezuela is no exception. More than ever, Venezuela is now on the front lines of a broader global geopolitical chess game placing the US, its western allies (with the current exception of Turkey) and leading Latin American states against a coterie of competitors including Russia, Iran and other acolytes.

However, Russia and friends must tread cautiously in Venezuela. Geographic reality presents a major obstacle as Venezuela lies in the Americas. Unlike many other parts of the world, since the end of the Cold War, the overwhelming majority or nations in the western hemisphere possess liberal democratic governments. The clear exceptions are Cuba and Venezuela. While some others like Nicaragua are pursuing a very troublesome path.

Furthermore, Russia’s leverage is far more limited in Latin America beyond Venezuela where a 14-nation regional bloc, known as the Lima Group and formed in August 2017, remains united and directly opposed to the Maduro regime. It continues to apply collective pressure. Its members include major regional players such as Brazil and Colombia that share borders with Venezuela. They are bearing the brunt of the refugee outflow, which currently stands at 3 million people, which is more than 10% of Venezuela’s population.

The Maduro regime’s ability to maneuver in the region has become far more constrained. Long gone are the Bolivarian Revolution’s glory days of this century’s first decade when the boom in oil prices allowed former President Hugo Chavez to spread his largesse across Latin America. He had a sizable bloc of ideological allies on his side throughout the region.

Within the Venezuela equation, it is also important not to underestimate the Cuban factor. Once Hugo Chavez assumed the presidency in 1998, Venezuelan oil became the lifeline of the Cuban economy. Cuba provided thousands ofexperts, including doctors, technicians and thousands of committed revolutionaries who infiltrated, and still dominate, the ranks of Venezuela’s military, security and intelligence apparatus. These diehards with vested interests in Venezuela are committed to protecting and preserving the Maduro regime and are unlikely to go down without a fight.

The issue of potential foreign – primarily meaning US – military intervention in Venezuela continues to dominate headlines. The bottom line is that over the years the US has had contingency plans to deal with crises around the world, hotspots and potential flash-points, and particularly those closest to the homeland. Continuous instability in Venezuela, and its potential for hemispheric spillover, has placed the country in the upper echelons of America’s hotspot priority list in recent years. The emergence of any worst-case scenarios in Venezuela would increase the potential and advance the case for military intervention.

However, if any extreme humanitarian situation in Venezuela called for some form of intervention, it would likely involve collective action with regional partners – not just the US, but other states including Brazil and Colombia, Venezuela’s immediate neighbors who continue to bear the brunt of the refugees and spillover from Venezuela’s economic collapse.

Any form of intervention would unlikely receive support or authorization from United Nations Security Council due to Russian and Chinese opposition. However, the Organization of American States could potentially serve as a platform and provide some of legitimacy for any collective action – particularly should an extreme humanitarian situation endanger peace, security and stability in the Americas.

Despite surviving previous crises, the Maduro regime is confronting a new form of pressure with US oil sanctions that hits directly at the regime’s purse and its ability to placate the military financially. Although the armed forces’ top brass has pledged its support for the regime, military support at large is not iron-clad. There is spreading discontent in the armed forces’ lower ranks. Many of their families are experiencing the same material deprivations as ordinary Venezuelans. Polarization and divisions are increasing. The bottom line is that the regime’s long-term survival cannot be guaranteed without the firm support of a united military. It is within these ranks that the regime’s future will be largely determined.

Furthermore, the overwhelming majority of Venezuelan oil is exported and refined in the US. Seeking to rely purely on alternative markets outside the US is an uphill struggle. Conducting business will become far more costly, burdensome and at some point not economically viable.

Over the years, the regime has economically pillaged the state oil company, PDVSA, as a political tool. It has also failed to invest in maintenance and infrastructure to keep the company competitive. PDVSA has been the hand feeding the regime’s endemic corruption and economic mismanagement. US sanctions add enormous pressure to PDVSA’s existing decrepit state of decay. Nicolas Maduro is reaping what Hugo Chavez sowed. Ultimately, the Bolivarian revolution’s survival was always dependent on the international price of oil. In recent years, it has been manifesting its true colors.

Marco Vicenzino, founder and director of the Global Strategy Project, is a strategic advisor in geopolitical risk and international business development to senior executives and corporations operating globally and appears as an expert commentator on world affairs on leading international media outlets, including CNBC, BBC and CNN.
msv@globalsp.org